Bajpai for regional financial system

The Securities Exchange Board of India (Sebi) chairman G N Bajpai on Tuesday mooted the formation of a regional financial system in the South Asian region.

Speaking at the South Asian Federation of Exchanges, Bajpai said cross-border listing of companies will promote growth of capital across the region.

Bajpai listed out essential requirements for the formation of this regional financial system""harmonisation of listing agreements, regulations, sharing of skillsets, and sharing of information.

"Harmonisation of listing agreements is required to improve the quality of the securities. Wider participation will lead to greater liquidity and the reduction in intermediation costs," said Bajpai.

The Sebi chairman was inaugurating the seventh conference and fourth annual general meeting of the South Asian Federation of Exchanges. The federation is meeting in the city to discuss cross-border listings across member countries.

The organisation comprises 12 member bourses from seven nations, along with their regulators. This year the delegation from Kuwait has come as an observer.

"Stock exchanges, being effective vehicles to mobilise savings in this era of low interest rates, will attract enormous capital. This is evident from the over-subscription of the mega issue of Tata Consultancy Services in India, and the privatisation of Pakistan Petroleum Ltd. in Pakistan," said Syed Asim Jaffar, chairman of SAFE and Lahore Stock Exchange, Pakistan.

The conference will also look at strengthening co-operation between the regulators of the region member exchange and listed companies, which is necessary for devising a common platform.

"Cross-border ownership is growing worldwide," said Wali-ul-Maroof Matin, secretary-general of SAFE and the chief operating office of Chittagong Stock Exchange, Bangladesh.

"In recent times, with the development of information technology, a great number of investors are trading on bourses outside their countries. Potential companies are getting listed on more established markets outside their home territory," he said.

Another issue to be discussed by the federation is the identification of a permanent secretariat in one of the member countries.